AutoNation launches search for new CEO as Mike Jackson transitions to executive chairman role

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Mike Jackson: "The company is ready for its next chapter with a strong base, a coast-to-coast brand, a comprehensive brand extension strategy and a transformational digital consumer car buying experience."

UPDATED: 19-9-2018 7:08 am ET – adds links

AutoNation Inc. launches a search for a new CEO, while Mike Jackson prepares in the long term to take on a new role as executive chairman of the largest dealer group of new vehicles.

Jackson, who turns 70 in February, will continue his current role as chairman, CEO and president during the succession process, the company said Wednesday. Jackson, who has been General Manager of AutoNation since 1999, is expected to switch to the position of Executive Chairman next year. AutoNation has extended Jackson's contract to 2021 in that role.

The announcement means that Jackson will lose the CEO title much earlier than he has ever indicated. Earlier he had already said that he wanted to run AutoNation as long as friend and competitor Roger Penske had rival Penske Automotive Group. Penske was 76 when Jackson made the remarks.

The move comes 10 months after Jackson has implemented a five-year review of AutoNation's strategy to position the retailer for the long-term future. Those steps include putting the name AutoNation on most of the company's stores; setting up online storefronts from AutoNation Express; launching independent points of sale for used cars; brand parts, accessories and financial and insurance products with the corporate moniker; and maintenance of Waymo self-propelled vehicles.

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Jackson referred to those actions in the Wednesday announcement.

"The company is ready for its next chapter with a strong base, a coast-to-coast brand, a comprehensive brand extension strategy and a digital consumer car buying experience transformation," said Jackson. "While the board is starting their succession process, we will continue to focus on delivering an unmatched customer experience and implementing our brand extension and digital strategies."

The shares in AutoNation reached a new low of 52 weeks of $ 42.87 in afternoon trading, Tuesday before closing at $ 43.09 per share. The 52-week high is $ 62.02.

Executive search

The board of directors of AutoNation has retained executive search firm Spencer Stuart to help find a new CEO. The company said it will consider both internal and external candidates.

The current top lieutenant of Jackson is COO Lance Iserman, a 17-year-old AutoNation veteran who has been in this position since June 2017. Iserman has been the third COO of the retailer since 2015. Jack Jackson's old number 2, Michael Maroone, stepped out of that position and retired early 2015. Maroone was replaced by Long-serving AutoNation executive Bill Berman, who then May 2017 left the company.

Jackson has been regularly on the CNBC company network for several years. He acted as guest guest during Wednesday morning's broadcast. Photo credit: grab CNBC screen

At the time of Iserman's promotion last year, Jackson noted that the move did not mean that his new COO would have the right job for the position of CEO. Jackson told Automotive News that the company would consider the entire AutoNation leadership team to replace him when he retired, as well as outside candidates.

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Besides Iserman, he praised other executives, including Scott Arnold, executive vice president of customer care and brand extensions; CFO Cheryl Miller; and Chief Marketing Officer Marc Cannon.

The Penske model

Jackson also said that his pension plans were far away. He previously signed a contract in January 2015 that extended his employment with AutoNation until at least 2019.

In 2013, shortly before Jackson turned 65, he told Automotive News that he planned to stay with the company indefinitely, claiming to pursue Roger Leader's leadership term. "Let's say that Roger retires when he is 85, in which case I will be [near] 75. You can then say: 'Mike will retire in ten years' time. & # 39; What Roger also has in store, I am at stake. & # 39; Penske is now 81 and continues as chairman and CEO of the rival car dealer.

In a separate statement Jackson refused to say whether he thought he would come close to a new contract extension than the just-announced date of 2021.

"I focus on the short term, which is the continued success of the brand extension strategy of AutoNation, continued digital [transformation] and preparing the company for the transition to the new CEO, "said Jackson.

The independent leader of AutoNation, Michael Larson, praised Jackson's leadership over the past 20 years at the retailer.

"The board of AutoNation will initiate its search for the next CEO who can take over the baton from Mike and lead AutoNation to the next phase of continued growth and success," said Larson, chief investment officer of Bill Gates, co-founder of Microsoft. Gates became the largest shareholder of AutoNation through its various investment vehicles at the beginning of 2016.

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Lured by Huizenga

Jackson joined the retailer in 1999, from the top job at Mercedes-Benz USA, by the deceased founder of AutoNation Wayne Huizenga. He faced immediate challenges – Jackson described it as "chaos" – and quickly moved to close most of the retailer's 29 megastores used for automobiles and turned the rest into new car dealerships. He also killed plans for the rollout of a national brand, although he kept up with the idea and turned his back on the time until the 2013 rollout of the AutoNation brand spared all of the company's dealers for luxury brand stores.

Jackson has now completed a mission during the turnaround of AutoNation. In July he was inducted into the Automotive Hall of Fame in Dearborn, Mich.

"I am always looking for ways to maintain our leading status, from diversifying our portfolio mix to creating our own brand products, to setting up a culture in which 26,000 people focus on driving cancer," said Jackson. "After successfully implementing each and having gained insight into the changing car landscape in retail, it was clear that now was time for the transition."